Tech/NFTs
Published on August 30th, 2022 |
by Jerry Doby
The cryptocurrency trend doesn’t show any signs of slowing down. Many analysts and experts predict Bitcoin, Ethereum and Cardano could hit all-time highs within the next five years. As this market has exploded over the last decade, it has created brand new industries within it. One of these markets is the NFT market.
An NFT (non-fungible token) is a financial security consisting of digital data stored in a blockchain, which is a form of distributed ledger. The ownership of an NFT is also recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded. They are an excellent store of value and seem to withstand market volatility better than cryptocurrencies on their own.
Many NFTs are sold and traded as art pieces. Much like art in the real world, the owner has a certificate of authenticity that shows that they own the original. This is the record in the blockchain that is unique to the owner of the NFT. You may be asking yourself where to buy an NFT. There are plenty of marketplaces available and it is now a multibillion-dollar market. It includes a number of celebrities who have their own NFT brands or promote a certain NFT marketplace.
Snoop Dogg is one of the most well-known celebrities involved in the NFT marketplace. The rapper admitted that he was going under the username of Cozomo de’ Medici when purchasing his NFTs. Identified as an anonymous art collector with over $17m in NFT assets, in 2022, Snoop Dogg also announced plans to turn Death Row Records into the first “NFT label.” However, he isn’t the only celebrity involved in the space. Other celebrities, including Jimmy Fallon, Paris Hilton and Lindsay Lohan, have all endorsed NFTs.
The value of some NFTs has increased by over 600% in the last year, and many people have now entered this market due to the profits on offer. Trading in NFTs spiked 21,000% to top $17bn in 2021. However, it is important to note that you must only invest in these marketplaces if you have done the correct market research and understand them. You must also only invest money that you can afford to lose.
The cryptocurrency market and NFT market, while overlapping in some ways, are two different entities. Both have pros and cons, and many people look to hold NFT’s for longer periods than cryptocurrency. However, many NFTs may only be purchased using established cryptocurrencies such as Ethereum. Ethereum is the cryptocurrency that currently sits in second place in the top 10 (based on market cap) and has been in this position for several years.
Market cap is a shortened term for market capitalization, which in cryptocurrency is calculated by multiplying the current coin price of a certain crypto market by its circulating supply. Ethereum is a cryptocurrency conceived in 2013 by Vitalik Buterin. Other developers include Gavin Wood, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin. Many analysts and experts believe Ethereum is a better investment than Bitcoin in the long run as it continues to innovate in the cryptocurrency space.
There are several factors to consider when establishing how much an NFT is worth and whether or not it is a good investment. Some people choose to invest in an NFT because they believe that it will hold value in the future. They see this market as offering what they consider a safer investment option, as world currencies struggle to manage inflation. People are constantly looking for alternative ways to invest their money to ensure they get the best value.
Others invest in NFTs to secure digital ownership of physical assets and collectables, and enjoy access to exclusive perks. Due to the technology that underpins NFTs, they are difficult to forge or steal. This is another positive for investors being attracted to this space. In any event, each investment poses its own unique level of risk. This is the case for all types of investments, and not just cryptocurrency or NFTs.
If you invest in stocks, shares or property, they can all be subject to market volatility. Ultimately, if you’d like to invest in an NFT because you are intrigued by the space, there’s certainly scope to make some profit. The same applies in the world of cryptocurrency. As long as you undertake the correct research and have a solid exit strategy, you will most certainly have the odds in your favor.
About the Author
Jerry Doby Editor-in-Chief of The Hype Magazine and internationally published arts & entertainment journalist.
Connect with Jerry on Twitter and Instagram at @jerrydoby_
Member of the U.S. Department of Arts and Culture and the United States Press Corps. Partner at THM Media Group, Inc.
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